THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

ANDERSON COOPER, CNN ANCHOR: Good evening, everyone. New developments tonight in two disappearances: a beloved missing daughter and an alleged Ivy League con artist. Thanks to your help, police are chasing new leads.

Also tonight: The world famous self-proclaimed psychic who got it wrong about Shawn Hornbeck, she told us to check her record. We did. We will tell you the surprises we found.

First, though, a real eye-opener on Iraq: The man chosen by President Bush to oversee the war telling senators today he does not know whether he supports the president's plan to send more troops. Not only that -- Admiral William Fallon says he's not even sure he would send reinforcements, if requested by General David Petraeus, the new commander on the ground.

Listen.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: And you would support sending more troops to accomplish that goal?

ADMIRAL WILLIAM FALLON, U.S. NAVY: I don't know how many troops are going to be necessary to effect the outcome that we want. But General Petraeus, in my conversations with him, indicated that he believes he needs these troops now, to get moving...

GRAHAM: And, if he said he needed more, you would support him?

FALLON: I don't know, sir. I haven't been there yet, and I'm not in a position to make that judgment.

GRAHAM: Well, it's his judgment about 21,500, does it make sense to you?

FALLON: I will better be able to give you an informed answer when I understand the situation better.

(END VIDEO CLIP)

COOPER: Admiral Fallon also warned members of the Armed Services Committee that it may be time to redefine the goals in Iraq, and that time is running short to turn things around -- not exactly a ringing endorsement from the man chosen to run Central Command.

John Roberts is in Washington tonight.

John, some surprising testimony today from Admiral Fallon.

JOHN ROBERTS, CNN SENIOR NATIONAL CORRESPONDENT: It was a little bit surprising, Anderson, especially from a commander. But perhaps it's something that should be expected, a bit of a trend in recent confirmation hearings.

Remember, Robert Gates, the new secretary of defense, when asked, said he didn't think that the U.S. was winning the war in Iraq. In one way, it's refreshingly candid. Here's a guy who hasn't yet signed off on the president's policy, said: Look, I have spent the last few years in the Pacific. I don't really know too much about this plan.

And he is saying: I'm not going to make a decision about it until I get over there, get my eyes on the ground, and can make my own informed decision.

A retired general that I talked to tonight, Anderson, who -- who is critical of the way that the war is going, believes that Fallon is being very honest, that this is a high-risk strategy, with an uncertain outcome, and he's not about to put his imprimatur on it at face value. He wants to get over there and get a look for himself.

COOPER: And Carl Levin was certainly surprised.

What does this mean for the White House?

ROBERTS: Well, what it means is, it puts a definite speed bump in the White House's ability to sell its message on Iraq.

Here's the president, who went through these weeks of meetings and -- quote -- "consultations," which is an interesting buzz word that the White House has used, and suddenly comes along his handpicked general -- or admiral, to run CENTCOM, and he's saying that he can't sign off on this policy -- so, definitely a little bit of a bump in the message coming from the White House tonight, Anderson.

COOPER: Obviously, Democrats are probably going to be talking a lot about this in the coming days.

ROBERTS: Not only Democrats, but Republicans as well who oppose this strategy.

What it does is, it gives them another piece of ammunition against the so-called surge. They can now say, you know, why should we support the president's idea of putting more troops in there, when the guy that he has picked to -- to run CENTCOM can't even sign off on the whole thing?

COOPER: And not -- as you said, it was Republicans. I think Arlen Specter also had some comments.

ROBERTS: Yes.

There was some real news that was made today in the Senate Judiciary Committee. Arlen Specter, who used to chair that committee, until Democrats took control, was reflecting back on what the president said back on April 18 of last year, when he was defending Secretary of Defense Donald Rumsfeld, when President Bush said: I'm the decider. I'm going to decide what's best.

Well, here's what Arlen Specter had to say about that today, in regard to the Iraq war.

(BEGIN VIDEO CLIP)

SEN. ARLEN SPECTER (R), PENNSYLVANIA: The president repeatedly makes reference to the fact that he is the decider. I would suggest, and suggest respectfully, to the president that he is not the sole decider, that the decider is a shared and joint responsibility.

(END VIDEO CLIP)

COOPER: Legally, where does Bush stand?

ROBERTS: For the moment, Anderson, he is the decider. All Congress can do at this point is curtail funding for the Iraq war or the war in Afghanistan. And there's no appetite on Capitol Hill for that.

But what you see here is an interesting dynamic at play, that you have not only Democrats, but also Republicans in Congress, try to get back some of that authority that they believe they have in order for this country to wage war.

And it's really beginning to permeate the entire party as well. There was a luncheon today where the -- the Republicans got together with Vice President Cheney, Arlen Specter saying there was so much emotion in that charged room, and even Senator Lindsey Graham saying that the White House has lost a lot of credibility on this issue, that their ability to apply pressure at the moment is about zero -- so, the president in real trouble on this issue, not only among Democrats, who are in control, but among members of his own country -- Anderson.

COOPER: John, thanks for the update.

Fueling some of the doubts and the hesitation to send more troops is the ongoing Sunni-Shia violence, which took at least more 50 lives today in Iraq. And many of the attacks were targeting Shia pilgrims marking the holiest period on the Shia calender.

CNN's Michael Holmes now with a view of the proceedings that outsiders rarely get. Take a look.

(BEGIN VIDEOTAPE)

MICHAEL HOLMES, CNN INTERNATIONAL CORRESPONDENT (voice-over): Up close, at the religious ritual of Ashoura in Baghdad's Kadhimiya district, men, young and old, beating their heads with swords and knives, sharing the pain of the grandson of the Prophet Mohammed, the Imam Hussein, killed in a battle 1,400 years ago, a battle that divided Muslims and created the Shia sect of Islam. "For Hussein, for Hussein," the man yells at us.

To walk these streets is to feel the fervor of Shiites at the third most important shrine in Shia Islam. This was, for us, both a rare opportunity and a statement on security in Baghdad. It's been a long time since we have been able to walk freely on a Baghdad street, just five U.S. soldiers with us, and, more importantly, the protection of a respected local sheik.

Usually, video like this is shot by Iraqis, not Westerners. But, this day, we walked within a quarter-mile of the revered shrine, in an area controlled by Shiite militiamen. Children approach us. Adults look on. And the observance continued.

(on camera): There were some rockets and mortars fired earlier today, none of them landing here in Kadhimiya -- no injuries. And the celebrations here have been going off largely without a hitch amid very tight security.

(voice over): An hour or so later, however, a mortar did land in this area, likely fired by Sunni militants, and wounding nine pilgrims. But security efforts were considered successful here -- multiple checkpoints keeping vehicles out, even children patted down before proceeding.

There was devotion, not tension, on these streets -- huge vats of rice and meat cooked and handed out to hungry pilgrims who traveled from far and wide, mushrooming the local population from 100,000 to more than a million.

U.S. troops based here say walkabouts like this are the way forward, where possible.

LIEUTENANT COLONEL STEVE MISKA, U.S. ARMY: You have got to engage with the people. That's the only way you can find out what their issues are.

HOLMES (on camera): And, yet, a couple miles across the river, if you walk down the street like this?

MISKA: You would use different techniques.

(LAUGHTER)

HOLMES (voice over): The respect afforded Sheikh Mohammed Baca (ph) certainly helped with our security this day. He's a man who speaks of moderation, favors dialogue with Sunnis, and says extremists on both sides are the problem. He also supports the U.S. presence.

"If the Americans weren't here," he says, "the Shia will win the war in four hours."

But, in a place where religion so often sparks violence, it was religion alone that ruled the day.

(END VIDEOTAPE) COOPER: Michael Holmes joins us live now in Baghdad.

Michael, what if, a week from now, you were walking down that same street with -- without the sheik, without the soldiers, just you and your crew?

HOLMES: Yes, it's a good point.

The chances are, we wouldn't get very far, or, if we did, it would be amid a lot of protest and mistrust. You know, there's different shades, as you know, of the Mahdi militia. Now, the Mahdi militia is ubiquitous in Kadhimiya. But they're a more moderate, if I can use that term, version of the Mahdi. It's not like going into Sadr City.

Still, without that sheik with us, it probably would be a very different scenario, and we would not be nearly as welcomed or left alone as we were on this day. It was an extraordinary experience, to be able to walk at that level -- this particular sheik very powerful in that area. And this whole issue of tribal power, that has always been a criticism, that the U.S. hasn't fully understood it. In this area, the U.S. commanders do. And they're working with him -- Anderson.

COOPER: A fascinating look.

Michael, thanks very much -- Michael Holmes in Baghdad.

In Iraq, Sunnis and Shia have had to flee the fighting. Here's the "Raw Data" on that.

Last year alone, nearly 250,000 men, women and children were driven from their homes and moved to other regions in Iraq. That includes more than 41,000 Iraqi families; 28 percent were Sunni; 64 percent of the displaced were Shia.

Now, the elephant in the room, Iran -- tonight, sources are telling CNN that military investigators are now looking into the possibility that Iranians or Iranian-trained operatives carried out that sneak attack on American forces 10 days ago in Karbala. Five soldiers, you will remember, were killed in that raid, four of them abducted and later shot by English-speaking fighters dressed in American-style uniforms.

At the very least, this jacks up the tension one more notch between Washington and Tehran.

And that's where you find CNN's chief international correspondent, Christiane Amanpour, in Tehran.

Christiane, as we just heard, military investigators are looking into this possibility that Iranians could have been responsible for the Karbala attacks. If that's confirmed, how significant would it be, how surprising?

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Well, I think surprising, it would be, because Karbala is not just the holiest place -- or one of them -- for the Iraqi Shiites, but also for Iranian Shiites.

It is where Imam Hussein was martyred 1,400 years ago, as you have just been describing, but it would also, more pertinently, be a direct and overt act of war. And there is no indication that the Iranians, up until now, no matter what they have been doing in Iraq -- no matter what the accusations have been, there has been no indication up until now that they are -- have engaged in any direct acts of war against the American forces there.

But, in addition, there have been so many of these attacks in the past, and none of those have been blamed on -- on Iranians up until now. And, from what I can tell from the sources that are saying about this about the potential investigations, they're saying it's a very early stage; they have no firm evidence to -- to support their investigations; they're just doing early questioning, which, presumably, is logical when five of your soldiers have been tricked, kidnapped, abducted, and murdered.

I think that, certainly, we have had no response here to that, and nor to the allegations.

COOPER: Christiane, the rhetoric...

AMANPOUR: Anderson.

COOPER: The rhetoric between President Bush and Iranian President Ahmadinejad, it's really -- it's becoming more heated. You're in Tehran. How are the Iranian people reacting? How does that -- that rhetoric play?

AMANPOUR: Well, with concern, very, very much concern, because people here, like perhaps people in America, perhaps people around the world, recognize a pattern of rhetoric that they saw back before 2003 in the invasion of Iraq. And they're very concerned about that.

People, you know, when you ask them, they don't really think there is going to be a full-scale invasion of Iran, but they're very concerned that there might be some attack on Iran, and that all this rhetoric is preparation or an excuse or looking for ways in which to come in here.

Certainly, it hasn't been helped by the provocative and confrontational rhetoric of the Iranian president, whether it be about the nuclear program, whether it be about many, many other things. And, so, this has caused a general sense of unease here, and particularly since the president of Iran has basically been chastised by two very prominent newspapers, one of which allied with the supreme leader here, the religious leadership here, which have basically told him, indicated that that rhetoric needs to be toned down.

UNIDENTIFIED MALE: And they would be moving cocaine, marijuana. It just so happens that, when we got in here, we found a load of marijuana.

COOPER: Tunnels from Mexico -- you demanded action. Billions in the budget, yet, they can't find a few million to get it done. We're "Keeping Them Honest."

A self-proclaimed psychic with something to prove.

(BEGIN VIDEO CLIP, "LARRY KING LIVE")

SYLVIA BROWNE, SELF-PROCLAIMED PSYCHIC: There's a lot of cases I have solved right on Montel's show. I also cracked the ski mask rapist case.

(END VIDEO CLIP)

COOPER: Sylvia Browne, wrong about Shawn Hornbeck, she gave us a list of success stories. We checked it out. But she might like what we found -- the psychic, the skeptics, and the facts, when 360 continues.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

COOPER: CNN's Michael Ware has been reporting from Iraq since the war began in 2003. And, over the last four years, he's watched one war multiply into four separate battles.

There is no single insurgency, he says, and there hasn't been for years. It's a crucial fact that often gets lost in the telling. And, yes, it is as complicated as it sounds.

Michael was in New York last week, a rare visit back to our newsroom, and a chance for him to explain who's fighting whom in Iraq and why it matters. Iran's role in all of this may seem like the most recent development in Iraq, but its roots are actually very deep.

And that's where we begin.

(BEGIN VIDEOTAPE)

COOPER: The fourth war that's going on in Iraq, the proxy war against Iran, how did Iran get involved?

MICHAEL WARE, CNN CORRESPONDENT: Iran has been involved from the very, very beginning.

Don't forget, you know, Iran and Iraq share a land border. There's many tribes and families that -- that live on both sides of this border. In the '80s, Saddam launched a vicious eight-year war against Iran. So, Iran very much has legitimate national security interests in terms of Iraq. And we have seen Iran aggressively pursue those interests.

What happened during the invasion, as U.S. and British forces advanced from Kuwait to the north, clearing Saddam's forces as they went, we saw, essentially, an Iranian-backed invasion at the same time that filled the vacuum that was left behind.

It was extremely well-organized and coordinated. And, in fact, the irony is, we saw Iran use the -- the very same successful tactic that the American Green Berets used in Afghanistan to win against the Taliban and al Qaeda, against U.S. interests in Iraq.

COOPER: You mean covert forces...

WARE: Very much.

COOPER: ... small numbers.

WARE: During Saddam's regime, hundreds of thousands of Iraqi Shia fled to Iran. Iran saw many of these people, not only as brethren and -- and refugees to be protected, but as an asset.

Hundreds, thousands, tens of thousands of these Iraqi Shia who were in Iran were mobilized and used by the Iranians within its armed forces.

COOPER: What would they do? They went in with money? They went in with arms?

WARE: With everything.

What they did is, in the chaos and the vacuum of power that was left behind the advancing coalition forces, they took power. They took the governor's office, the police chief's office, the Baath Party headquarters. And they never really left.

And, indeed, what the British found, as we learned from the British army report into the execution killing of six of its military police in 2003 by Iranian-backed Iraqi militias, is that, when they arrived in one of these major border provinces here, they found that the militias were already so strong that the report said the British had a choice to either confront them or to accommodate them.

And the report says that, for the sake of stability and security, they felt they had no other choice but to accommodate these militias. So, that entrenched the militias in power.

COOPER: And they have given the militias of, like, for instance, Muqtada al-Sadr, they have given them training; they have given them arms and money? WARE: Yes.

What we saw with many of these networks and these organizations that were in Iran is that they were kept in place, and they moved into Iraq. And with them came what's essentially Iranian Green Beret advisers.

You had Iranian form of CIA advisers all come in with them to guide, direct, to channel them. And even elements within Iraq, like Muqtada al-Sadr, the rebel anti-American cleric, and his Mahdi army militia, Muqtada and his militia were very different to these others.

They never fled Iraq. They didn't go into Iran. They remained in Iraq. Now, in the beginning, that was a great rallying cry for Muqtada. He was able to represent himself as a true nationalist: I stayed, while these people left. I suffered with you.

That was very persuasive. That drew a lot of people to his cause. But, over time, we have seen Iran not only court Muqtada, but, then, militarily, support him. We have seen a flow of money, a flow of arms, and a flow of training back and forth.

(END VIDEOTAPE)

COOPER: We will have much more from my interview with Michael coming up in the next hour of 360, a special edition called "Iraq: The Hidden Wars," how one battle became four, and what that means for turning things around in Iraq, if that's even possible -- also, Michael's chilling encounter with al Qaeda insurgents. They nearly executed him. He will tell us how he got away -- all that and more, as I said, starting at 11:00 p.m. Eastern time tonight.

First, seer or deceiver? Self-proclaimed psychic Sylvia Browne says she has proof she's helped people. We know she has got it dead wrong about Shawn Hornbeck, telling his frantic parents he was dead, but what about her success stories? We will compare the results -- the facts, coming up.

Also tonight: underground and open for business -- the border tunnels the government knows about, but says can't find the money to close -- next on 360.

(COMMERCIAL BREAK)

COOPER: Well, we cover a lot of stories about illegal immigration. And we have done a lot of reporting at the border. Each time, we always find something new.

Tonight, you may be surprised by what we have uncovered. Back in October, President Bush signed a bill that authorized $5 billion to better secure the U.S. border. Well, today, we learned that several gaping holes still exist, quite literally.

Dan Simon is "Keeping Them Honest" tonight. He joins us near San Diego, where the largest tunnel to ferry drugs and aliens across hasn't yet been filled. Dan, what's going on?

DAN SIMON, CNN CORRESPONDENT: Well, Anderson, I know you have been here.

We're in Otay Mesa, California. Tijuana, Mexico, is just a few hundred yards that way. This is a very industrial area, a lot of warehouses, a lot of well-traveled streets here.

And, just below us -- it's hard to believe, but, just below us, there's a half-mile tunnel that extends all the way from the Tijuana side to this warehouse, inside this warehouse, which I am standing in front of. You're talking about a tremendous distance here.

Now, this tunnel was discovered last year. It was capped off. But it wasn't filled up entirely with concrete, which means the tunnel is still intact. Now, there are six other tunnels like this throughout the Southwest that also have not been filled up with concrete.

Now, authorities tell us they're confident these tunnels are not being used. They say that they're under constant surveillance. But critics say (AUDIO GAP) need to be (AUDIO GAP) why (AUDIO GAP) well, they're (AUDIO GAP) and, right now, they're...

COOPER: Obviously, we're having a little technical problem hearing the end of Dan's report.

He couldn't get inside the El Grande tunnel tonight. It's been capped on either end. But, last year, we did. And, remember, despite all the talk in Washington about securing out borders, smugglers and illegal immigrants may still be using tunnels like this to get across.

Here's what it looked like when we went below.

(BEGIN VIDEOTAPE)

COOPER (voice-over): The exit doesn't look like much, a three- by-three-foot hole in the floor of a San Diego warehouse. Climb down this ladder, however, and what you discover is stunning.

(on camera): ICE agents will tell you, this is one of the most sophisticated tunnels that they have ever discovered underneath the U.S.-Mexican border. It likely took years to build. You can see some of the -- the pick marks used. And this is -- this is stone, so, digging through this would take a long time to do.

It's also got electricity. They have wired the entire tunnel with these cables that have light bulbs on them. There's even a pipe that brings in fresh oxygen that was pumped in from Mexico.

MICHAEL UNZUETA, IMMIGRATION AND CUSTOMS ENFORCEMENT: We came in and removed all the bulbs and took those to the lab for fingerprint evidence.

COOPER: Oh really? You... (CROSSTALK)

UNZUETA: And, then, we replaced them with our own light bulbs.

COOPER (voice-over): Well, Mike Unzueta is the special agent in charge of Immigration and Customs Enforcement in San Diego.

UNZUETA: Yes, I mean, you can see right here there's a junction box for electricity. They probably used these junction boxes in the construction, if they had some sort of electrical tools that were assisting them in the drilling.

COOPER: This tunnel is just one of several that have been discovered by San Diego's Tunnel Task Force.

UNZUETA: And here's where it really starts getting kind of wet.

COOPER (on camera): When you're walking in the tunnel, it's -- it's easy to get disoriented. It's hard to get a sense really, just how big it is. They say the tunnel is about seven football fields in length underneath the United States and about one football field in Mexico. It's a total, they say, of about 2,400 feet.

(voice-over): It's the largest tunnel ICE has ever found under the U.S.-Mexican border.

(on camera): I mean, it goes -- it's as far as the eye can see, just a straight shot all the way down.

UNZUETA: Exactly. It's as far as you can see.

COOPER: And it looks like there's water all the way through.

UNZUETA: Yes. And, actually, this is one of the shallower parts.

COOPER: This -- basically, there's a -- this is like a T- intersection in the tunnel?

UNZUETA: Right.

COOPER: What does it tell you? Do you think they made a mistake? You think they kept tunneling that way?

UNZUETA: Well, we don't know if they were headed for some other intended exit, or if they made a mistake and got lost in the digging, and then had to make a course correction, and then dug this portion that's right behind me. And, then, of course, the straight shot is over into Mexico.

COOPER: There's no way to tell how long this tunnel was in operation. The ropes are still all around. These were probably used to actually carry the bails of marijuana by the -- the people who were bringing the drugs into the United States.

And, gradually, as the -- the tunnel rises up toward the -- the exit point in San Diego, they have actually poured concrete here to build steps to make it easier for people to walk on.

How would the drug operation work? Do -- do you know?

UNZUETA: Well, we think it would be kind of like a series of ants. There would be a number of people that would be starting in Mexico, either carrying boxes or bundles across, or maybe backpacks, making their way, all the way across the tunnel, to this side, probably depositing them at the entrance, and then backtracking again.

From a Department of Homeland Security perspective, I mean, we're looking at this as a vulnerability to our nation's security. So, whether it was drugs or aliens or who knows what else, you know, tunnels are of paramount importance.

COOPER: In Mexico, the entrance to the tunnel drops about 90 feet, but, here on the San Diego side, the exit is just (INAUDIBLE) below the surface to the ground.

And you would emerge from the tunnel, and you're in an industrial warehouse in San Diego.

UNZUETA: This is the exit. It's not really elaborate, but it gets the job done. It's certainly more sophisticated down below.

COOPER: For me, what -- what makes this so surreal is you're come out of the tunnel and you're in this industrial warehouse in San Diego.

UNZUETA: Right, I mean, you're in a warehouse that really you would see in any industrial park anywhere. It's pretty nondescript once you're in it.

(END VIDEOTAPE)

COOPER: So as we said, the tunnel has capped at either end. You might be asking, why haven't -- why hasn't the whole tunnel been filled in? We're told by Customs and Border Patrol that they are still studying how best to do that. In some cases, they are environmental concerns. In other cases, the tunnels are below private property, and then there's also the money.

At this point, there's no funding mechanism to pay for it. It would cost them $2.5 million to fill it all in.

Our "Shot" today is something we haven't seen in more than four months. New video of Cuban leader Fidel Castro. Today, Cuban television broadcast what it says is the ailing leader's meeting with Venezuelan president, Hugo Chavez, yesterday. Castro was dressed in a track suit again, and he looked heavier, perhaps, and healthier.

Chavez said the two leaders spent two hours discussing various topics, including the, quote, "threats of the empire", a reference to the United States.

Castro ceded power to his brother Raul in late July before undergoing intestinal surgery. The Cuban government has kept the specific details of his condition and recovery a secret.

Maybe a psychic could get some answers. Maybe not. We're going to put one to the test.

(BEGIN VIDEO CLIP)

COOPER (voice-over): A self-proclaimed psychic with something to prove.

SYLVIA BROWNE, PSYCHIC: There's a lot of cases I've solved right on the "Montel" show. I also cracked the ski mask rapist case.

COOPER: Sylvia Browne, wrong about Shawn Hornbeck. She gave us a list of success stories. We checked it out, but she might not like what we found.

Witness to a mystery woman.

UNIDENTIFIED MALE: The woman over there, take a good look at her, and I'll tell you why later.

COOPER: An alleged con artist on the run, a beloved daughter. Two women, one mystery that you're helping to solve. New leads, new insight into a troubled young life, only on 360.

(COMMERCIAL BREAK)

COOPER: As we mentioned earlier, several attacks today in Iraq, at least 50 people killed, most of it Sunni versus Shia violence. In our next hour, in the 11 p.m. hour of 360, we're going to take a look inside the insurgency through the eyes of CNN's Michael Ware. You saw a bit of the interview a few moments ago. So many gripping stories, including this one.

One day, as Michael tells it, he decided to meet face-to-face with some insurgents, and it almost cost him his life.

(BEGIN VIDEO CLIP)

MICHAEL WARE, CNN CORRESPONDENT: What happened is Al Qaeda said, "Well, we now own this." So I went in there to document this, to see if it was true, and to try and show this.

COOPER: Are you nuts?

WARE: Well...

COOPER: Do you ever ask yourself that?

WARE: Yes, often, actually. In the end, these men intercepted my vehicle and, with grenades with the pins pulled, so that they were live, hauled me from the car, and with my own video camera, now preparing to film my execution.

(END VIDEO CLIP) COOPER: How Michael got away, what's really happening on the ground in Iraq, it's all part of a 360 special, starting at 11, "Iraq: The Hidden Wars".

But first, the story of Shawn Hornbeck's homecoming captured the attention of the country. Several days after Shawn was found alive, we reported that while he was missing, his parents had turned to self- proclaimed psychic, Sylvia Browne, for help.

Browne told Shawn's parents he was dead and even told them where they could found his body. She was wrong, of course. After our report, we spoke to Sylvia Browne's business manager and the psychic herself, who insisted that Browne has helped thousands of people.

We asked for some proof, and they sent it to us. Tonight here's what we found when we checked out their claims for ourselves.

(BEGIN VIDEOTAPE)

COOPER (voice-over): In the months after Shawn Hornbeck disappeared, his parents were desperate.

CRAIG AKERS, SHAWN HORNBECK'S STEPFATHER: You would think that eventually you would find some evidence or find someone that saw something happen or some little clue to give you some kind of an indication as to what really happened. And right now we have nothing.

COOPER: They turned to the "Montel Williams" show, and self- professed psychic Sylvia Browne for help. That's when they got the worst possible news.

PAM AKERS, SHAWN HORNBECK'S MOTHER: Is he still with us?

BROWNE: No.

COOPER: Browne told them their son's body could be found about 20 miles southwest of their home in a wooded area near two jagged boulders, but Shawn Hornbeck was found alive in Michael Devlin's apartment, about 50 miles northeast of their home. His parents say they'll never forget the pain they say Sylvia Browne caused them.

C. AKERS: Hearing that was one of the hardest things we ever had -- had to hear.

COOPER: Browne makes no promises about being right all the time, but by her count, she's solved hundreds of cases.

LARRY KING, HOST, "LARRY KING LIVE": Do you ever work with, like, police?

BROWNE: Yes, I have 250 cases, in fact, right on my -- there's a lot of cases I've solved right on the "Montel" show. I also cracked the ski mask rapist case.

COOPER: The ski mask rapist terrorized the San Francisco Bay area during the late 1980s. Browne writes about the case in her book "Insight", claiming she told police the suspect's last name began with the letter "S" and, quote, "He works for the city, something to do with the streets, actually under the streets."

George Anthony Sanchez was arrested and convicted of raping 26 women. He was a sewer repairman for the city.

The Los Altos police confirmed Browne was involved with the case but could not tell CNN what extent, because the case happened so long ago.

Browne maintains she never chases after missing person cases, but she'll help if she's asked. While police were searching Rock Creek Park for Chandra Levy in the summer of 2001, Sylvia Browne was asked about the case during a television appearance. She said the intern was dead and her body was in that park, which it was.

In the wake of the 1993 World Trade Center bombings, Sylvia Browne was interviewed by the FBI. She says she described one of the suspects.

COOPER: That conversation, according to Browne, took place on March 16, 1993, and she claims she was talking about Mohammed Salama, who was convicted in the terrorist attack. But he was arrested on March 4, 1993, 12 days before Sylvia Browne talked with the FBI.

Browne says she's done thousands upon thousands of reading during her 50-year career and that she has thousands of letters and affidavits from people she's helped. Browne's office sent us two of those as examples of her successes.

One of the letters was impossible to verify. The other was from Sharon James, who did a telephone reading with Browne in 2003, two years after her 35-year-old son disappeared.

SHARON JAMES, HELPED BY SYLVIA BROWN: She told me that my son was in Tennessee and that he was alive.

COOPER: Two months later Sharon James received a letter in the mail. The return address was from Tennessee.

JAMES: And I thought she was absolutely right, he was in Tennessee. Why else would I have gotten the letter?

COOPER: But the letter turned out to be from an insurance company in Tennessee that was looking for her son.

(on camera) Had he been living in Tennessee?

JAMES: No, he had never lived in Tennessee.

Sharon James.

COOPER (voice-over): Sylvia Browne had made one more prediction about Sharon James' son.

JAMES: He had been prone to occasionally take off and come back and take off and come back, so I asked her if she thought maybe he was bipolar, and she said no, he was schizophrenic.

COOPER: James says her son has not been diagnosed with schizophrenia or any other mental illness, and the suggestion that her son was schizophrenic caused her anxiety.

JAMES: I had this vision in my mind that he was living on the streets and schizophrenic, like you see schizophrenics in movies or something, and so it became very stressful.

COOPER: James has since reunited with her son in November of 2005, about a year later than Browne predicted. She paid $700 for her half-hour phone reading, and when she first talked to Sylvia Browne, James found some comfort, but now she says she wouldn't do it again.

JAMES: I was in such a different frame of mind at the time. I was emotional, I was grieving, I was worried, I was stressed, and I was looking for answers anywhere I could find them.

COOPER: And that, her critics say, is the problem with Sylvia Browne.

ROBERT LANCASTER, FOUNDER, STOPSYLVIABROWNE.COM: People come to her with their problems. They're desperate, and she preys on that. She takes advantage of that. She takes their money. She makes believe that she's psychic, and that's reprehensible. It's evil, is what it is.

COOPER: Browne responded to critics on her web site saying, quote, "Those who choose to believe in our philosophy will continue to do so because of their own convictions. Those who negate if after one human error never truly embraced our philosophy anyway, and that's OK."

(END VIDEOTAPE)

COOPER: Well, Sylvia Browne's business manager is standing by live, along with one of Browne's biggest critics, psychic debunker James Randi. I'll talk to both of them next.

Plus, the high school dropout who allegedly stole another woman's identity and conned her way into the Ivy Leagues. Tonight, she's on the run, and thanks to a 360 viewer, police may be closer to tracking her down. Stay tuned.

(COMMERCIAL BREAK)

COOPER: Well, before the break, you heard of self-proclaimed psychic Sylvia Browne's predictions, predictions her own people gave us as examples of success stories. Whether or not the predictions were actually correct may be a matter of interpretation.

Joining us now, two people with drastically different opinions on the subject, Sylvia Browne's business manager Linda Rossi, and psychic debunker James Randi.

Linda, thanks for being on the program. We asked you and Sylvia Browne for some examples of success stories. You said Sharon James was a success, and Sylvia Browne claims she all but named one of the World Trade Center bombers. It turns out that was almost two weeks after he'd already been arrested.

Do you still consider those success stories?

LINDA ROSSI, SYLVIA BROWNE'S BUSINESS MANAGER: Yes, because at the time that she spoke about that, she didn't know that they had been named. And not only that, but she also worked on the Chandra Levy case, which she talked to the parents after they requested her to do so, and I might add, free of charge. She never charges anyone to do that.

COOPER: But you said on the World Trade Center case, though, that it was before those people had been named. We did a Google search. That guy's name was all over Nexis, all over newspapers multiple times.

ROSSI: Well, I don't know about the exact date of that, but I do know when Sylvia put forth that prediction, when it was publicized might be a different matter, but when she put forth that prediction, that name was not known.

COOPER: Well, the FBI video which you sent us, which is her FBI testimony, that, according to you guys, that was at least some two weeks after this guy had already been arrested and after his name was already out there.

In the Chandra Levy case, they were already searching in the park. Isn't that correct?

ROSSI: They were searching in the park during the time, but not -- not during the time when she talked to the family and told them where they were, only when they did the interview.

COOPER: And Sharon James, do you feel she's still a success story?

ROSSI: I talked with, yes, Sharon James myself personally. She testified to the fact that during the time when she got the notice that she received from Tennessee, that she felt that that was a validation from the standpoint that he was in Las Vegas and had never in fact been in Tennessee. And she felt he must have had some type of insurance connection in Tennessee.

The point being that he was found alive and well. Granted, it was after the time that Sylvia thought that he would, but nonetheless that he was found alive and well.

COOPER: But Sylvia was saying...

ROSSI: And Anderson, wait a minute. I would like to add here, first and foremost, that Sylvia is a teacher, a spiritual teacher and a humanitarian, and her...

COOPER: But actually, first and foremost on her web site it says psychic.

ROSSI: First and foremost she is a spiritual teacher.

COOPER: OK, that's actually second on her web site.

ROSSI: Part of that -- the psychic part is a part of that, but her major thrust in the world...

COOPER: Just so we're accurate, on her web site, when you Google her, and I just went to your web site. It says, "Sylvia Browne, psychic and spiritual teacher," so first and foremost she's a psychic.

ROSSI: OK. Well, first, she has -- you can't separate the psychic part from her spirituality.

COOPER: But she makes her money from being a psychic.

ROSSI: She supports her religious organization and her corporation from being a psychic. Yes, that's a fact.

COOPER: OK.

ROSSI: All of which is returned back to her spiritual organization and her corporation. Sylvia gets no money at all from her psychic readings personally.

COOPER: OK, I want to bring in James Randi. James, you've actually called Sylvia Browne a villain.

We spoke to Ted Gunderson, who's a retired senior special agent in charge of the FBI in Los Angeles. He's worked with Sylvia Browne, and he says -- he says he's worked with her quite a bit. And he said this about her. He says, quote, "I've worked with numerous psychics in the past and very few are really on target, but Sylvia Browne is probably one of the most accurate psychics in the country."

Now, that's from a former senior FBI official. Are you saying he's wrong?

JAMES RANDI, PSYCHIC DEBUNKER: I think that perhaps he doesn't know enough about his subjects. I'm not talking about law enforcement now. I'm talking about detective work.

But he has to judge these things much more carefully, I would think, Anderson. He has to look at the total reading, everything that she says about any one fact, and evaluate that.

What you've done here, and what has been done here, I should say, is that cases that were successful or apparently successful have been selective. Now this is very much like the race track devotee who goes to the races, loses his money...

RANDI: The point is that the fellow at the racetrack keeps on very proudly telling you about the number of horses that he bet on that have come right up front and made money and such. But he's in tatters, because he doesn't win in the long run.

COOPER: Linda...

RANDI: If he selects the evidence, it always comes out the way you want it to.

COOPER: Got your point.

Linda, Sylvia maintains that she'd not 100 percent accurate and she never claims to be.

ROSSI: Absolutely.

COOPER: But when she told Shawn Hornbeck's frantic parents that he was dead and where to find his body, she sounded pretty certain. She didn't say, "I think he's dead, but I could be wrong." She said, "He's no longer with us, and here's where his body is."

ROSSI: Because we still don't have the body of this case. We don't know...

COOPER: Shawn, you think he may be dead?

ROSSI: No, not Shawn Hornbeck. But we -- you know, she could have seen another person that was -- that was also...

COOPER: She didn't say maybe it's another person. She said he's dead, and here's where his body is.

ROSSI: I understand that. This is what she said, but she has also claimed she is not 100 percent. She is a vessel by which the energy comes through or information comes through. She's just merely a vessel from God. You can't separate the two.

And for Randi, as a professed atheist, to judge anyone of spirituality is a joke. He has now negated -- now wait a minute. Everything she does is through God, with God. She gives God credit for everything.

Randi is a professed atheist who claims that anyone who believes in a religion is weak-minded and superstitious. He's negated Christianity. He's negated Islam. He's negated every religion...

COOPER: So -- OK. That's like a high school debating tactic, to attack the guy who's asking the question, as opposed to answering the actual question.

ROSSI: No, but that's -- you can't separate -- wait a minute, Anderson. You cannot separate the psychic ability from the spirituality. It comes from God. COOPER: Wait. But so by me asking questions, am I godless, too?

ROSSI: No, of course not.

COOPER: OK, so you're not attacking my religious beliefs?

ROSSI: But you're doing a fair-minded reporting. What he's doing is he's judging, and as a magician, he doesn't have the credentials to judge anyone. On psychic ability of any type.

COOPER: OK. We're going to take a short break, and I want to continue the discussion. Again, I appreciate both of you being on the program. We'll be right back.

Linda, I want to ask you something, because earlier Shawn Hornbeck's parents had stated that on the "Montel Williams" show, after they were told that Shawn was dead, they wanted to speak to Sylvia more outside of the parameters of the show and were told that they'd have to pay her rate of $700 for a half hour. Is that true?

ROSSI: I will stand with my life on this, that that is not true. Now, somebody might have told her that that wasn't connected with our office. That I can't attest to, but Sylvia has never, ever charged any individual who has come in with a missing person case or a law enforcement agency. That...

COOPER: I want to be clear. They didn't say -- they were unclear on who told them that, so I want to point that out, as well.

ROSSI: Exactly. It could have been somebody -- thank you. It could have been somebody from the show who didn't know anything. But our staff, the shortest term that any member of our staff has been with Sylvia is 20 years. I myself have been there 35. I have never, ever -- and I've seen people from all walks of life, religious, whatever...

COOPER: But she does make $700 for a half-hour read?

ROSSI: She does make $700 -- she doesn't make $700. The $700 that she charges, unsolicited. She never asks for anyone to do that. The same with, you know -- the same with our religious beliefs. People come to us seeking our help.

What I really want to question, James Randi, before we go into him, is this from now has been bordering on a malicious persecution of Sylvia. Why doesn't she go after the charlatans, the true charlatans that are out there, bilking people thousands of dollars?

COOPER: Let me ask James. What is so bad about Sylvia Browne? What's so bad about Sylvia Browne? RANDI: There's nothing intrinsically bad about Sylvia Browne that isn't bad about all of the people who pretend to the grieving people out there who need them or believe they need them that they can speak to the dead.

No, I have gone after Sylvia Browne...

ROSSI: The same can be true of religion.

RANDI: ... because she's a big figure -- would you mind? I go after Sylvia Browne because she is a major figure in the field. And she gets a lot of publicity, a lot of exposures on shows all over the world. She is one of the major figures that I go after, yes.

COOPER: James, you challenged Sylvia Browne to take a test of her psychic ability. What would exactly that test be, very quickly?

RANDI: Very quickly? Well, she would do readings for ten people, ten people that would be chosen because they believe Sylvia Browne and they believe she has powers, and they believe in psychic powers of that sort.

She would do ten readings. We would then shuffle those ten readings and give them all to the people who had the readings done for them and ask them to sort them out, which one is your reading? It should be pretty evident that you could take the reading that was made for you, and you could single that out.

COOPER: All right. So you're -- so Linda -- I know arguing is popular on cable news, but we just don't like it on this show. So Linda, you're saying Sylvia will not take the test, bottom line?

ROSSI: No, because she has nothing to prove to James Randi.

COOPER: So she...

ROSSI: She has nothing to prove to James Randi. Her spiritual work speaks for itself. Over 50-plus years of work.

RANDI: Take the test.

COOPER: We'll let the audience be the judge on that.

James Randi, appreciate you both being on the program, Linda, as well. Thank you very much.

ROSSI: Thank you.

COOPER: You can decide for yourselves.

Before we go to break, a quick programming note. We had planned to bring you Gary Tuchman's report here on the alleged Ivy League con artist missing, along with the woman whose identity she allegedly stole. The conversation we just saw just ran kind of long. We're going to bring you Gary's report tomorrow.

Just ahead, why the war in Iraq has turned into four separate wars, none of them easy to fight. Some unparalleled firsthand reporting from CNN's Michael Ware on the fighting, in depth. You won't find it anywhere else.

Also, talk about Iran's growing influence and how Michael almost became a hostage. All that and more when 360 continues.

(COMMERCIAL BREAK)

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